What is the Market Going to Do?
Since the beginning of the year, the stock market has been treading water eking out a small gain of 5.94% (Vanguard Total World Stock ETF VT) and bonds are practically even at a 0.78% gain year-to-date (Vanguard Total Bond Market ETF BND).
No one knows what the market is going to do, but here is a prediction that will almost certainly be wrong, but here it is anyway. When the Federal Reserve finally does raise interest rates, Wall Street (read the large banks and brokerage houses) would be upset, and hit their sell buttons, resulting in a temporary selloff and market downturn. At the same time, with the Fed announcement of increased interest rates, bond prices will also go down due to the expectation of higher interest rates. After a short while common sense will prevail and the market should get back to where it was before the media and Wall Street swept up the hysteria. What do you do with your portfolio? Nothing, except the periodic rebalancing. Let everyone else sell low and then get back in the market by buying high. My 10 cents worth, which will probably be wrong, but there you have it anyway!
Healthcare in Retirement
The 2015 Retirement Health Care Cost Data Report estimates a healthy couple retiring at 65 this year most likely will spend $266,000 on Medicare Part B (covers doctors’ visits and outpatient services), Part D (prescription drug plans) and supplemental Medigap insurance over their lifetimes. The study also estimated that a 66 year old couples’ health care expenditures will consume 67% of lifetime Social Security benefits. A similar couple retiring in 10 years’ time, are expected to use 90% of these benefits. Don’t get caught in this healthcare spiral, by saving adequately for expenses that we have a high likelihood of incurring in our later years.
There has been a lot of news on security breaches lately, with the news that the Federal Office of Personal Management (OPM) was hacked, probably by the Chinese. It is reported that over 4 million Federal employee records may have been compromised and possibly a lot more. In future I plan to periodically have updates on how to protect your information that will be helpful.
What you can do to protect yourself from such data breaches:
Consider Freezing your Credit File at Major Credit Bureaus
- If you are a current or former Federal employee or even have had a security background check performed on you, I would seriously consider freezing your credit.
- A security freeze essentially blocks any potential creditors from viewing or pulling your credit file, unless you unfreeze it.
- Freezing your credit involves notifying each major credit bureau to freeze your account. It can be done online, by phone or mail and you will be given a PIN that you would use to unfreeze the account if necessary. In NM the cost ranges from free to $10 per credit bureau to place and lift a freeze. There are four consumer credit bureaus (Equifax, Experian, Innovis and Trans Union).
- Why is a credit freeze better than a Fraud Alert? A fraud alert is free, but is only for 90 days unless you extend it. You need a police report or other proof of identity theft.
More information on Security Credit Freezes is available on the KrebsOnSecurity site at How I Learned to Stop Worrying and Embrace the Security Freeze
In May, Roberta could not keep away from the ABQ Brew 5K Dash. Unfortunately I had a tennis match, so missed all the fun (and the freezing rain and wind)! The NAPFA Spring Conference was held in beautiful San Diego, during southern CA’s record week of rainfall. I kept indoors most of the time, getting smarter and keeping mostly dry! In June, the Run to Break the Silence held a Biathlon (20K bike & 5K run) to Jemez Dam in Bernalillo, which was a lot of fun. Felt so good afterwards that I offered to play in my tennis team’s playoff’s final, but my captain had more sense to play someone else, to qualify the team for Sectionals in Albuquerque in August.
Contact me for a review meeting if needed. Please plan early for setting up an appointment. Feel free to pass this newsletter on to whoever may be interested, or encourage them to sign up directly on the website.
Is there a topic you would like to see covered in a future newsletter? If so, drop me a line.